Sunday, December 3, 2023



Benefits and Features of Aadhaar Enabled Payment System

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An Aadhaar-enabled payment system or AEPS by the national payment corporation of India has been introduced to facilitate the payment process using an Aadhaar number. According to the Aadhaar payment system, individuals use their Aadhaar number to access Aadhaar relating bank accounts. Here, the transactions can be of any kind, such as cash, interbank fund transfers, cash withdrawal, and deposits. It can enhance the motive of RBI’s electrifying transactions.

Financial inclusion can bring financial improvement in India, and RBI has taken the initiative. It is mainly for Micro ATMs and enhanced connectivity for Aadhaar-based transactions. This is how the bank-led model is expected to cause significant changes and improvements in the financial sector.

Advantages of Aadhaar Enabled Payment System

Let us discuss some objectives to encourage AEPS:
* Customers can use the payment system to access their bank accounts that are Aadhaar linked. It further helps perform tasks like cash deposits, withdrawals, balance checks, fund transfers and getting a mini statement

* It helps in fund distribution under government-related schemes like a pension scheme, NREGA, handicapped old age pension and the like ones

* It is mainly to create a solid platform to encourage the advancement and use of Aadhaar-based banking services

* It also helps encourage more payment electrification and have financial inclusion digitally with the help of AEPS

Features of Aadhar Enabled Payment System (AEPS)
* Using the AEPS, bank customers have to use their Aadhaar number as a tool to identify the Aadhaar-linked bank details to complete a transaction. The types of transactions are withdrawals, inter-banking fund transfers, cash deposits, balance inquiries, and others.

* The Aadhaar payment system only asks for biometric identification with a 12-digit unique code that initiates the transaction.

* The facility allows inter-bank secure and safe operations.

* The payment system allows the disbursement of government entitles like NREGA, Social Security Pension or SSP, and Handicapped Old Age Pension scheme of state or central body. It requires an Aadhaar card for identification.

* It is also helpful in case of electrification or any retail payment process to go smoothly.

* The AEPS allows banks to route Aadhaar related inter-banking through the use of a clearing agency and central switching.

As it is interoperable in any banking operation, it is easy to use this payment. It helps get pertinent information to cross-check or detect any retail payment fraud.

How to Use the AEPS?
The Aadhaar-enabled system is hassle-free, and the following steps can help you:
* Visit the micro-ATM of the respective bank

* Enter 12 digital identification codes along with the bank’s name

* Now, choose the type of transaction as per your preference

* You should authenticate and verify the biometric details using fingerprints or iris scans as necessary

* After the verification is complete, don’t forget to get the money receipt

Which Services can be Offered by Aadhaar AEPS?
The AEPS can offer various services, and they are as follows:

* Carry out a cash withdrawal

* Find out about the bank balance

* Get a mini statement

* Help in online authentication

* C2B and C2G payment transactions

* BHIM Aadhaar pays

* Facilitates Aadhaar to Aadhaar Transfer

It can also help check Aadhaar status, demo authentication, help in e-KYC, and others.

Use of AEPS in Various Sectors
The NPCI developed AEPS to target various objectives for organizations and individuals to participate in the financial system with the help of AEPS in the following ways:

>> Banks
The AEPS allows hassle-free interoperation between banks with an effective KYC process. It can help save money and address customers in remote areas where the branches are not present.

The AEPS has made the banking system easy for everyone, and they can carry out banking activities without visiting the branch. Customers don’t have to worry about cards, passwords or pins as the AEPS system facilitates it easily.

>> Government and Regulators
The inclusion of AEPS is to take the financial process outside India and help individuals operate from anywhere they want. It allows one to go cashless, with digital transactions of retail payment and set up a suitable framework, like that of BHIM Aadhaar Pay.

>> Merchants
AEPS can help traders to use digital payments beneficially and with complete security.
Given the model of the AEPS system, it helps in intra and inter-bank transactions by helping with a verified gateway for individuals accessing Aadhaar-linked accounts.

What to Consider in Using AEPS?
A clear understanding of the AEPS can help individuals be careful when relying on the mode of transaction.

* It is a prerequisite to link the Aadhaar card with the bank account

* With multiple bank accounts, select one to link with your Aadhaar card and use AEPS

* While using AEPS, use the security code or OTP

* Individuals are allowed to transactions only between the linked Aadhaar linked accounts

* You can use accounts under different banks for AEPS, and individuals can select one account to use this banking facility

It is better to know the steps beforehand as you can easily decide on the account to link with AEPS.

Transfer Limit Using AEPS
As per the rules and regulations of RBI, one can withdraw rupees 10 000 per transaction using AEPS. Several banks prefer this payment system to prevent misuse of online transactions. In such cases, the daily limit for fund transfer is rupees 50000.

Final Part
The Aadhaar authentication is necessary to use it for various AEPS services. The ways of biometric matching include face authentication, IRIS, and fingerprinting. The only way to make the AEPS service work effectively is to link the Aadhaar card with the bank account, and you can easily handle the transactions. It is mainly to encourage cashless and digital transactions and help in more use of Aadhaar-linked accounts for individuals. It can further help catch misuse of data or fraudulence in the online transaction process.

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